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Price of existing zero-coupon bonds

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Assume the following information for existing zero-coupon bonds:
Par value =$100,000
Maturity = 3 years
Required rate of return by investors = 12%

How much should investors be willing to pay for these bonds?

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Solution Summary

How much investors should pay for an existing zero-coupon bond is determined.

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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